Your Directors present the 30th Annual Report of your Company together
with the Audited Annual Accounts for the financial year ended 31st
March, 2015.

* Financial Highlights

Particulars Financial Year ended
(in rupees)

31st March, 2015 31st March, 2014

Total Income 23,274,126.20 44,511,712.78

Total Expenditure 22,850,149.13 44,225,365.31

Profit/ (Loss) before tax 423,977.07 286,347.47

Profit/ (Loss) after tax 175,078.07 176,135.47

Paid-up Share Capital 147,385,250.00 147,385,250.00

Reserves and Surplus 73,545,044.75 73,369,966.68

* Operating Highlights

During the year under review total Income of the Company is Rs.
23,274,126.20 as against Rs. 44,511,712.78 in the previous year. The
Company incurred a profit of Rs. 175,078.07 after taxes. Your Directors
are putting in their best efforts to improve the performance of the
Company.

* Company''s Affairs

Sonal Mercantile Limited (registered with the Reserve Bank of India
(RBI) as a Non-Banking Financial Company), engaged mainly, in the
business of providing Secured and Unsecured Loans & Advances and
investing in securities, both quoted and unquoted. The Company offers
specialized solutions for meeting specific liquidity requirements with
technical insights into capital markets.

* Material changes and commitments affecting the financial position of
the Company after the close of financial year

Save as mentioned else where in this Report, no material changes and
commitments affecting the financial position of the Company has
occurred between the end of the financial year of the Company- 31st
March, 2015 till the date of this report.

* Change In The Nature Of Business

There were no changes in the nature of the Business during the
Financial Year ended 31st March, 2015.

* Dividend

In view of marginal profits made by the Company, your Directors regret
their inability to recommend any dividend for the financial year
2014-15.

* Share Capital

There is no change in the Equity Share Capital of the Company during
the financial year under review.

* Fixed Deposits

The Company has not accepted any fixed deposit during the year under
review falling within the purview of Section 73 of the Companies Act,
2013 read with Companies (Acceptance of Deposits) Rules, 2014.

* Successful Listing on BSE Limited

As you know the shares of the Company are listed on Delhi Stock
Exchange and in the meantime the Company''s shares have also been listed
on BSE Limited Board of in February, 2015 under Direct Listing Route.
The Company has already paid listing fees for the financial year
2015-16 to the BSE Limited and no annual fees is required to pay Delhi
Stock Exchange as the DSE is being a operational stock exchanges and no
demand has been made by DSE for annual fees for the financial year
2015-16.

* Particulars of Loans, Guarantees or Investments Under Section 186

Particulars of Loans and Guarantees are provided in the financial
statements (please refer the Note 12 to the financial Statements).

* Internal Control Systems and Their Adequacy

The Company has adequate system of internal control to safeguard and
protect from loss, unauthorized use for disposition of its assets. All
the transactions are probably authorised, recorded and reported to the
Management. The Company is following all applicable accounting
standards for properly maintaining the books of accounts and reporting
financial statements. The internal Auditor of the company checks and
verifies internal control and monitors them in accordance with policy
adopted by the company. The Company continues to ensure proper and
adequate systems and procedures commensurate with its size and nature
of business.

* Transfer to Reserves

As the company has not declared any dividend, therefore, the Company
has not proposes to carry any sum to the General Reserves of the
Company for the period under consideration.

The Company has transferred an amount of Rs. 35,016 to the General
Reserve put of current year''s profits and the same is in compliance
with the applicable provisions prescribed under the Special reserves
u/s 45-IC of the RBI Act,1934.

* Industrial relations:

During the year under review, your Company enjoyed cordial relationship
with employees at all levels.

* DIRECTORS

* Number of Meetings of the Board

During the year Twenty Two Board Meetings were convened and held,
details of which are provided in the Corporate Governance Report. The
intervening gap between the Meetings was in compliance with the
Companies Act, 2013.

* Policy on Directors'' Appointment and Remuneration

The current policy is to have a appropriate mix of Executive and
Independent directors to maintain the independence of the board,
separate its function of Governance and Management. As on March 31,
2015, the Board consists of 6 members, two of whom are executive or
whole time directors, and other three are independent Directors. The
Board periodically evaluates the need for change in its composition and
its size.

The policy of the company on directors'' appointment and remuneration,
including criteria for determining qualifications, positive attributes,
independence of a director and other matters provided under Sub-section
(3) of Section 178 of the companies Act, 2013, adopted by the Board, is
appended as "Annexure A" to the Board''s Report. We affirm that
remuneration paid to the directors is as per the terms laid out in the
remuneration policy of the company.

* Declaration by Independent Directors

All independent directors have given declarations under section 149(7)
of the Companies Act, 2013 that they meet the criteria of independence
as laid down under section 149(6) of the Companies Act, 2013 and clause
49 of the Listing Agreement.

* Board Evaluation

Clause 49 of the listing agreement mandates that the Board shall
monitor and review the Board evaluation framework. The Companies Act,
2013 states that a formal annual evaluation needs to be made by the
board on its own performance and that of its committees and individual
directors. Schedule IV of the Companies Act, 2013 states that
performance evaluation of independent directors shall be done by the
entire Board of Directors, excluding the director being evaluated.

The evaluation of all the directors and the board as a whole was
conducted based on the criteria and frame work adopted by the Board.
The evaluation process has been explained in this Annual report. The
Board approved the evaluation results as collated by the nomination and
remuneration committee.

None of the independent directors are due for re-appointment.

* Familiarization Programme For Independent Directors

Every new independent directors of the board attends an orientation
program. To familiarize the new inductees with the strategy, operations
and functions of our Company, the executive directors/ senior
managerial personnel make presentations to the inductees about the
Company''s strategy, operations, product and service offerings, markets,
software delivery, organization structure, finance, human resources,
technology, quality, facilities and risk management.

Further, at the time of appointment of an independent director, the
Company issues a formal letter of appointment outlining his/her role,
function, duties and responsibilities as a director. The format of the
letter of appointment is available on our website.

* Inductions

During the year under review, Pursuant to the provisions of the
Companies Act, 2013 and rules made there under and in compliance of
Listing Agreement, Ms. Rukhsana was appointed as the Independent
Director of the Company.

* Retirement/Re-appointment

To appoint Director in place of Mr. Deep Chand Singhal (DIN: 00815681)
who retires by rotation & being eligible offers himself for
reappointment.

None of Independent Directors will retire at the ensuing Annual General
Meeting.

* Resignation

During the year under review, Mr. Anil Kumar Goyal resigned from the
Directorship of the Company.

The Board hereby places on record his valuable contribution towards the
growth and development of the company during his tenure as director of
the Company.

* Disclosure Of Relationships Between Directors Inter-Se

Mr. Deep Chand Singhal and Mr. Sunil Kumar are directly related to each
other. As they both are Brothers.

* Details of Key Managerial Personnel

The following 3 persons were formally appointed/ designated as Key
Managerial Personnel of the Company in compliance with the provisions
of Section 203 of the Companies Act, 2013.

1. Mr. Sunil Kumar - Whole-Time Director

2. Ms. Deepika Rathore- Company Secretary

3. Ms. Anjali Aggarwal- Chief Financial Officer

* Committees Of The Board

Currently, the Board has Four Committees; the Audit Committee,
Nomination and Remuneration Committee, Stakeholders Relationship
Committee and Risk Management Committee.

A detailed note on the Board and its committees is provided under the
Corporate Governance report section in this annual report.

* Director''s Responsibility Statement

In terms of Section 134 (5) of the Companies Act, 2013, the directors
would like to state that:

i) In the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departure.

ii) The directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit or
loss of the Company for the year under review.

iii) The directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities.

iv) The directors have prepared the annual accounts on a going concern
basis.

v) The directors had laid down internal financial controls to be
followed by the company and that such internal financial controls are
adequate and were operating effectively.

vi) The directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such system were
adequate and operating effectively.

* Subsidiary Companies

The Company does not have any subsidiary.

* Code Of Conduct

The Board of Directors has approved a Code of Conduct which is
applicable to members of the Board and all employees in the course of
day to day business operations of the company. The Code has been placed
on the Company''s website www.sonalmercantile.com. The Code lays down
the standard procedure of business conduct which is expected to be
followed by the directors and the designated employees in their
business dealings and in particular on matters relating to integrity in
the work place, in business practices and in dealing with stakeholders.

All the Board Members and the Senior Management personnel have
confirmed compliance with the Code.

In order to ensure that the activities of the company and its employees
are conducted in a fair and transparent manner by adoption of highest
standards of professionalism, honesty, integrity and ethical behavior
of the company has adopted a vigil mechanism policy. The aim of the
policy is to provide adequate safeguards against victimization of
whistle blower who avails of the mechanism and also provide direct
access to the Chairman of audit Committee, in appropriate and
exceptional cases.

Accordingly, ''whistle Blower policy'' has been formulated with a view to
provide a mechanism for the Directors and employees of the Company to
approach the Ethics Counselor or the Chairman of the audit Committee of
the Company.

The purpose of this policy is to provide a framework to promote
responsible and secure whistle blowing. It protects employees willing
to raise a concern about irregularities within the Company. This policy
is also posted on the website of the company. The whistleblower policy
is appended as "Annexure B" to the Board''s report.

* Business Risk Management And Policy

Pursuant to section 134 (3) (n) of the Companies Act, 2013 and Clause
49 of the Listing Agreement, the company has constituted a risk
management committee. The details of the committee and its terms of
reference are set out in the corporate governance report forming part
of the Annual report.

The Company has implemented Risk Management Policy ("Annexed as
Annexure C") and the Board of Directors has prepared a comprehensive
framework of risk management for assessment of risks and to determine
the responses to these risks so as to minimize their adverse impact on
the organization. The policy as approved by the Board of Directors is
uploaded on Company''s website.

* Prevention of Insider Trading

The Company has adopted a Code of Conduct for Prevention of Insider
Trading with a view to regulate trading in securities by the Directors
and certain designated employees of the Company. The Code requires
pre-clearance for dealing in the Company''s shares and prohibits the
purchase or sale of Company shares by the Directors and designated
employees while in possession of unpublished price sensitive
information in relation to the Company and during the period when the
trading window is closed. The Board is responsible for implementation
of the Code. All Board Directors and the designated employees have
confirmed compliance with the Code.

* AUDITORS

* Statutory Auditors

As per the provisions of Section 139 of the Act, no listed company can
appoint or re-appoint an audit firm as auditor for more than two terms
of five consecutive years. Section 139 of the Act has also provided a
period of three years from the date of commencement of the Act to
comply with this requirement.

M/s V.N. Purohit, Chartered Accountants have been the Auditors of the
Company since Annual General Meeting held for the Financial Year
2012-13 and will complete their consecutive term of 5 years in the
Thirty Third AGM to be held in year 2018.

M/s V.N. Purohit, Chartered Accountants, being eligible for
re-appointment and based on the recommendation of the Audit Committee,
the Board of Directors has, at its meeting held on 30th May, 2015,
proposed the appointment of M/s V.N. Purohit, Chartered Accountants as
the statutory auditors of the Company for a period of three years to
hold office from the conclusion of this AGM till the conclusion of the
Thirty Third AGM of the Company to be held in the year 2018 (subject to
ratification of their appointment at every AGM). In this regard, the
company has received a certificate from the auditors to the effect that
if they are reappointed, it would be in accordance with the provisions
of Section 141 of the Companies Act, 2013.

* Auditors'' Report

Comments made by the Statutory Auditors in the Auditors'' Report are
self-explanatory and do not require any further clarification.

* Secretarial Auditor

Pursuant to provisions of section 204 of the Companies Act, 2013 and
The Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 the company has appointed Ms. Rachna Bhasin, Practicing
Company Secretary in practice to undertake the Secretarial Audit of the
Company for FY 2014-15. The Secretarial Audit Report is annexed
herewith as "Annexure D".

* Internal Auditor

The Board of Directors of your company have appointed Mr. Mukesh Kumar
Gupta, Practicing Chartered Accountant as an internal auditors of the
company and his report is reviewed by the Audit Committee from time to
time.

* Extract of Annual Return

In accordance with Section 134(3)(a) of the Companies Act, 2013, the
details forming part of the extract of the Annual Return in form MGT-9
is annexed herewith as "Annexure E".

* Corporate Social Responsibility

The provision of Companies Act, 2013 regarding Corporate Social
Responsibility shall not be applicable to companies having net worth
not exceeding Rs. 500 Cr or turnover not exceeding Rs. 1,000 Cr or net
profit not exceeding Rs. 5 Cr or more during any financial year, as on
the last date of previous financial year. In this connection, we wish
to inform you that in respect of our company as on the last audited
balance sheet as at March 31, 2015 neither the net worth exceeds Rs.
500 Cr nor turnover exceeds Rs. 1,000 Cr nor net profit exceeding Rs. 5
Cr. Hence, the provisions of Companies Act, 2013 regarding Corporate
Social Responsibility would not be applicable.

* Prudential Norms & Directions of RBI for NBFCs

Your company has complied with all the requirements prescribed by the
Reserve Bank of India and has filed the required returns.

a. Conservation of Energy & Technology Absorption: Since the Company
is not engaged in any manufacturing activity, issues relating to
conservation of energy and technology absorption are not quite relevant
to its functioning.

b. Export Activities: There was no export activity in the Company
during the year under review. The Company has no immediate plans for
export in the near future as well.

c. Foreign Exchange Earnings and Outgo: There was no Foreign Exchange
earnings and outgo during the year under review.

* Particulars of Employees

The information required pursuant to Section 197 read with rule 5 of
the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 in respect of employees of the Company, forms part of this
report and annexed herewith as "Annexure F". In terms of Section 136 of
the Act, the reports and accounts are being sent to the members and
others entitled thereto, including the information on employees''
particulars which is available for inspection by the members at the
Registered office of the company at all working days except Saturdays
between 11 A.M. and 01:00 P.M. up to the date of Annual General
Meeting. If any member is interested in inspecting the same, such
member may write to the company secretary in advance.

* Related Party Transactions

All related party transactions that were entered into during the
financial year were on arm''s length basis and also in the ordinary
course of the business. There are no materially significant related
party transactions made by the Company with Promoters, Key Managerial
Personnel or other designated persons which may have potential conflict
with interest of the Company at large. The details of Related Party
Transactions are disclosed in Note No. 27 attached to and forming part
of the Annual Financial Statements and also stated in Form AOC-2
annexed as "Annexure-G".

* Sexual Harassment

The Company has in place a Prevention of Sexual harassment policy in
line with the requirements of the sexual harassment of Women at
workplace ( Prevention, Prohibition and Redressal) Act, 2013.. All
employees (permanent, contractual, temporary, trainees) are covered
under this policy.

During the Year 2014-2015, no complaints were received by the Company
related to sexual harassment.

* Business Responsibility Report

Clause 55 of the listing Agreement is not applicable to our Company.
Since no initiative with respect to environmental, social etc has been
taken.

* Corporate Governance

The Company is committed to maintain the steady standards of corporate
governance and adhere to the corporate governance requirements set out
by SEBI. The Report on corporate governance as stipulated under Clause
49 of the Listing Agreement forms part of the Annual Report. The
requisite certificate from the Practicing Company Secretary confirming
compliance with the conditions of corporate governance as stipulated
under the aforesaid Clause 49, as also certificate from CFO are
attached to the Report on corporate governance.

* Management''s Discussion and Analysis Report

Management''s Discussion and Analysis Report for the year under review,
as stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges, is presented in a separate section forming part of the
Annual Report.

* Significant and Material Orders

There are no significant and material orders passed by the regulators
or courts or tribunals impacting going concern status and company''s
operations in future.

* Cautionary Note

The statements forming part of the Board''s Report may contain certain
forward looking remarks within the meaning of applicable securities
laws and regulations. Many factors could cause the actual results,
performances or achievements of the Company to be materially different
from any future results, performances or achievements that may be
expressed or implied by such forward looking statements.

* Acknowledgments and Appreciation

The Directors take this opportunity to thank the Company''s customers,
shareholders, investors, suppliers, bankers, financial institutions and
Central & State Governments for their consistent support to the
Company. The Directors also wish to place on record their appreciation
to employees at all levels for their hard work, dedication and
commitment.

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